2019 16th Annual MHA Business Summit Highlights

The 2019 16th Annual MHA Business Summit that took place March 6-8 in Las Vegas, Nevada, was a resounding success. This year’s Summit also set the stage for a celebration of MHA’s 30th anniversary: celebrating 30 years of helping Members manage costs, improve operational efficiencies and grow their businesses.

Twenty-two educational sessions spanning a variety of topics were held over the three days, with 1,400 representatives from long-term care, home infusion, specialty, hospice, and durable medical equipment pharmacies; health care executives; and industry partners participating.

The March 6 sessions included five Business Breakout educational tracks, with three focusing on the most important issues affecting long-term care (LTC) pharmacies, one focusing on the most important issues among home infusion and specialty pharmacies, and one focusing on current and future pharmacy technologies. Participants explored new and innovative ways to improve their businesses and were provided with tools to maximize business opportunities and meet ongoing challenges.

The March 7 and 8 general sessions provided participants with a high-level synopsis of the current state of alternate care site pharmacy, technology and global security, leadership, the impact of loneliness on population health and in the workplace, and analysis of federal and state programs and legislation that are affecting or will affect LTC, home infusion, and specialty pharmacy.

This highlighter provides an overview of selected sessions that took place during the three-day MHA Business Summit

State of the Industry

Michael J. Sicilian,
President, Managed Health Care Associates, Inc.

Mr. Sicilian kicked off the March 7 general session with a macro overview of the health care industry. He first focused on what’s trending in the health care market, noting that online technology has become a focus, with 85% of people trusting an online review of a health care provider. Unfortunately, hackers have also taken a key interest in the Internet, with 70% of providers being the target of a hack. Trends in skilled nursing include a continued slide in census, with occupancy rates at an all-time low of 81.7%, and a new payment model, the Patient-Driven Payment Model (PDPM), being implemented in 2019. He noted that in specialty pharmacy spending is up 9.4%, while in traditional pharmaceuticals it is down 4%. At the same time, more of the costs are being shifted to the patient.

Mr. Sicilian highlighted the continued growth of Medicare Advantage (MA) plans. These plans reduce beneficiary out-of-pocket costs while increasing utilization management to help control overall costs. He noted that all top ten largest Medicare Advantage organizations increased enrollment from 2018 to 2019, with a total increase of 1.4 million lives across all plans. The net result is more than 22 million lives covered, an increase of 32% since 2015.

Drug pricing was a focus of the presentation. Mr. Sicilian indicated that the cost of medications hasn’t been reduced―rather, it has been shifted to others within the drug distribution channel. Each organization within this channel blames another, and in the end the pharmacy gets paid less and the patient pays more. He noted that overall pharmaceutical prices continue to rise.

Mr. Sicilian closed by discussing the major challenges and opportunities within each of the major segments of the MHA markets—skilled nursing, LTC pharmacy, home infusion, and specialty pharmacy. He pointed out that there are significant challenges, but the opportunities are even greater. Mr. Sicilian emphasized that MHA will continue to be a major supporter of activities affecting these sites of care. MHA is monitoring the marketplace and has strategies in place within each of these market segments to maximize the opportunities and overcome challenges that may occur.

Lt. Gen. H. R. McMaster, US Army (Retired)
26th Assistant to the President for National Security AffairsNew York Times Best-Selling Author
Senior Fellow, The Hoover Institution

Gen. McMaster began his talk by focusing on national security and the “end of an era.” He noted that the United States has become deficient in key areas, including strategic competence to secure national security, advance prosperity across the globe, extend influence, and protect our national interests. This is due primarily to the flawed assumption that as one of the world’s “great powers,” we could build bridges and ensure that all great powers work together. Unfortunately, this perspective was overly optimistic.

Gen. McMaster next provided a historical perspective. In the late 1980s and ’90s, with the fall of the Berlin Wall, the US thought it was the great superpower. The 2000s swung the other way with 9/11, the invasions of Iraq and Afghanistan, and the stock market crash of 2008. In 2010 the US tried to move back to the middle and restore “strategic competence,” but this has been challenging with right wing movements in Europe, North Korean acceleration of nuclear arms, and Russian aggression across its borders.

What has been done to restore competence? Gen. McMaster closed by emphasizing the need to think clearly before taking action. He noted that 16 national and regional challenges or issues have been identified. All are being evaluated in detail by the current administration, and processes are being put in place should action be required.

Mr. McKeown opened his presentation by noting that current leadership skills don’t appear to be working. A recent study found that 77% of leaders believe they engage and motivate their employees, but 82% of these employees disagree with this statement! Mr. McKeown then went on to discuss the foundation for great leadership. He emphasized that most leadership models focus on leadership actions and behaviors while they should focus on the identities of the people within the overall group. Understanding the people within the group, what motivates them, and their mindset is what’s important.
Mr. McKeown listed four types of people and mindsets:

Innovators are creative people and good starters. Many are entrepreneurial. The challenge is keeping them focused.

Implementers are task oriented and results focused. They emphasize “getting it done” over how it gets done. The challenge is to get them to think about the process and getting others involved.

Sustainers are the organizers in a group. Many are problem solvers. They want to complete a task “the right way.” The challenge is getting them to think outside the box.

Collaborators are people oriented and consensus builders. They want to speak with everyone and get all their opinions before making a decision. The challenge is to get them to provide their opinion, not rely on everyone else’s comments.

A good leader can identify where all people within a group fit within each of these four mindsets. Unlocking their potential is essential to determine what’s good for the team, the organization, and the community. Mr. McKeown wrapped up by stating that a good leader should “be a guide, not the hero, and call others to their adventure!”

Dr. Murthy initiated his discussion by stressing that he did not grow up wanting to become Surgeon General. He worked as a practicing physician and was very content in his work. However, when he became Surgeon General, he recognized that many of his past experiences provided a strong basis for the position, which he said “connected the dots” with his previous roles and responsibilities.

He next discussed some of the major ongoing struggles in the US, including the opioid epidemic and people’s search for emotional well-being. He learned of these issues by listening to people and their problems. This, Dr. Murthy said, was one of the most rewarding aspects of being Surgeon General. He emphasized that after talking to many people, he is more optimistic for the nation than before he was Surgeon General.

Dr. Murthy then focused his discussion on emotional well-being. He explained that health systems don’t understand or get paid for improving emotional well-being. The system and its providers focus on the physical, not the mental or emotional. Unfortunately, not focusing on emotional well-being “is like fighting with one hand tied behind your back,” he said. This impacts the patient, as well as the provider, well-being. To illustrate his point, he noted that loneliness is very common and increases mortality the equivalent of smoking 15 cigarettes per day!

Dr. Murthy concluded his presentation by emphasizing that health systems and providers don’t understand emotional well-being but need to be trained in this area. Pharmacists, as providers that have significant contact with patients, can have a vital role in evaluating emotional well-being. It is essential that for the US health system to be improved, emotional well-being must be addressed.

Jack Hoadley, PhD
Research Professor Emeritus
Health Policy Institute, McCourt School of Public Policy
Georgetown University

Dr. Hoadley started his presentation by providing a broad overview of trends in Medicare. He noted that Medicare comprised approximately 15% of the federal budget in 2017, and an increasing amount of spending has gone to Medicare Advantage, which accounted for approximately 30% of all Medicare spending in 2017. Medicare growth will continue, with costs increasing from 3.7% of the gross domestic product (GDP) in 2017 to 5.8% of GDP by 2038 and a shortfall in funding for Medicare Part A by 2026. From a political perspective, most politicians want to keep Medicare safe and secure.

Dr. Hoadley then focused on two legislative acts affecting post-acute care (PAC)—the Bipartisan Budget Act enacted in February 2018 and the Improving Medicare Post-Acute Care Transformation (IMPACT) Act of 2014. The IMPACT Act became law in October 2014 and requires PAC providers to submit to the government patient assessment data, data on quality measures, and resource use data. The data submitted was analyzed, with the first report provided in 2016 and follow-up reports due in 2022 and 2023. Updated recommendations to the 2016 report came out in March 2018.

Prescription drug spending was the focus of Dr. Hoadley’s closing discussion. Retail drug spending is currently 12% of total health care expenditures, and this share has doubled over the last 50 years. Combined retail and non-retail spending is 17%. He provided a historical overview of drug spending from the 1970s with projections through 2026. It is anticipated that the average increase in spending will be 5% to 8% per year over that period. A large portion of this increase is in specialty drug spend, which comprises 46% of all spend in 2017 and is expected to increase in the future.

Dr. Hoadley ended his presentation by stating that Medicare is a very popular program and because of this, restructuring is unlikely. There is no consensus on major reform approaches, with changes to occur only when political groups can come together to recommend them. MedPAC is a source for information and recommendations when political opportunities do occur.

Mr. Flood and Mr. Douglas presented on the 2018 election results and an overview of the 116th Congress, as well as several bills that focus specifically on pharmacy. They opened their presentation by reviewing the flipping of the House of Representatives from Republican to Democratic control and the retaining of the Senate by Republicans. They emphasized that the parties are not homogeneous—there are key caucuses within each party that have various interests.

Their next topic of discussion was the health care agenda. The House is likely to take the lead on health care initiatives, with a primary focus on oversight and investigations, drug pricing, and protection and expansion of the Affordable Care Act. Mr. Flood and Mr. Douglas stressed that drug pricing is a high priority for this Congress. Even though drug pricing has been “on the radar” for many years, both agreed that recent actions may result in actual changes to drug pricing, including limiting market exclusivity, reference pricing, and changes to Medicare Part B pricing.

Mr. Flood and Mr. Douglas then focused on health care priorities in the 116th Congress. They discussed H.R. 1034—the Phair Pricing Act of 2019—that focuses on DIR fees and the requirement of pharmacy-negotiated price concessions to be included in the negotiated price at the point of sale. Also discussed was a drug price transparency bill, H.R. 789/H.R. 803—the Improving Transparency and Accuracy in Medicare Part D Spending Act, and a drug importation bill, H.R. 447/S. 97.

They closed by discussing the 2020 elections, noting the large number of Democratic contenders and the President’s poor approval rating. The “wild card” may be Independent candidate Howard Schulz, who could draw from both parties. Due to the extended election cycle, there is a narrow window to accomplish much on the health care front in the coming months, they concluded.

Ms. Wall started her presentation by laying out four major trends in the generic drug marketplace and analyzing the weighted average retail median price per day for older, middle-age, and newer generic drugs. What this analysis found was that pricing for most of these drugs increased around 2011 and has stabilized or decreased since that time. Unfortunately, the price of many of these drugs has not gone down to baseline but has remained higher than historical pricing. When examining which classes of medications have increased the most, the range is between an 11% increase in pricing for anti-infectives and a 31% increase in musculoskeletal drugs. This is a significant jump.

In addition to the increase in pricing, there has been a notable fragility in the supply chain. Many essential acute care drugs have had limited supply and availability. This is due to many factors, including complex manufacturing processes, fewer manufacturers and suppliers, lack of redundancy, and poor economics. This has resulted in critical drug shortages and increased prices.

Ms. Wall ended her presentation by discussing Civica, the first non-profit generic injectable manufacturer. The goals of Civica are to ensure a stable and predictable supply of essential generic drugs; to bring competition to certain generic drug market segments, focusing on value (price and quality); and to act as the conscience of the generic drug market, serving as a check against monopolistic behavior in the generic drug manufacturing industry.

The company is in the process of identifying sterile injectable products to manufacture and contracting with health systems. Future business development opportunities include evaluating solid dosage forms and contracting with post-acute care providers such as LTC pharmacies.

Troy Trygstad, PharmD, MBA, PhD
Vice President of Pharmacy Programs
Community Care of North Carolina

Dr. Trygstad opened his presentation by emphasizing how health care providers are becoming more integrated through strategic alliances and acquisitions. This is happening because care and payment are moving from a fee-for-service model to one of population management in which payment occurs not just at the time of encounter, but throughout the health management experience.

Dr. Trygstad stressed the importance of pharmacy differentiating itself from other providers in the health care delivery system. In fact, pharmacies must compete on differentiation to stay viable in the market. This differentiation must occur at three levels:

Care coordination

Integration of care

Clinical integration

Care coordination can be accomplished through collaborative care and collaborative practice agreements―which include management of all aspects related to medication management. Integration of care relates to a system-level change in the pharmacist’s role within patient care, where the pharmacist is part of the team caring for the patient. The third aspect, clinical integration, refers to a network of providers, such as pharmacists, working together with the common goal of improving quality of care and reducing overall costs. This integration occurs throughout the network and includes only those providers that can assist in meeting the network goals.

Dr. Trygstad closed by stating that for pharmacy to survive and thrive in the future, it must coordinate and integrate with systems and providers to improve patient care.

Technology Track

For the first time, MHA had a Business Breakout technology track. These were all panel sessions, with Industry Partners as panelists, and Shan Bhide, Vice President of Technology at SoftWriters and Tillman Johnson, Vice President of Product Management at MHA, as the moderators for these sessions. Four sessions were held, with an overview of these as follows:

Advances in E-HR/E-MAR Solutions to Enhance Improved Patients Outcomes in LTC highlighted the benefits of long-term care pharmacies integrating their LTC Operating System Software with E-HR and E-MAR solutions and provided strategies to leverage their present technology options to compete in the new digital age of healthcare.

Optimization of Medication Management and Drug Dispensing Methods Using Advances in Intelligent Automation in the LTC Continuum discussed the newest technology in medication management and drug dispensing methods and focused on ways that long-term care pharmacies can utilize these methods to help them grow their bottom line while differentiating themselves from the competition.

Current Trends and Benefits in Packaging System Integration with LTC Pharmacy Operations discussed the best ways for long-term care pharmacies to optimize packaging system integration with long-term care pharmacy operations.

Enhancements to LTC Pharmacy Operations and Workflows Using Optimized Eco System presented methods to create an efficient technology ecosystem to assist with growing LTC Pharmacy margins and achieving higher levels of compliance.

All four sessions were well attended with significant interaction between the panelists, moderators, and attendees.